You've likely heard the phrase "Internet of Things" — or IoT — at some point, but you might also be scratching your head figuring out what it is or what it means.

What is the Internet of Things?

The Internet of Things, commonly abbreviated as IoT, refers to the connection of devices (other than typical fare such as computers and smartphones) to the Internet. Cars, kitchen appliances, and even heart monitors can all be connected through the IoT. And as the Internet of Things grows in the next few years, more devices will join that list.

We've compiled a beginner's guide of IoT terms and questions to help you navigate the increasingly connected world.

What is an Internet of Things device?

Any stand-alone internet-connected device that can be monitored and/or controlled from a remote location is considered an IoT device. With more smaller, more powerful chips, almost all products can be an Internet of Things devices.

What is the Internet of Things ecosystem?

All the components that enable businesses, governments, and consumers to connect to their IoT devices, including remotes, dashboards, networks, gateways, analytics, data storage, and security is part of the Internet of Things ecosystem.

Other Internet of Things Terms & Definitions:

Entity: Includes businesses, governments, and consumers.

Physical layer: The hardware that makes an IoT device, including sensors and networking gear.

Network layer: Responsible for transmitting the data collected by the physical layer to different devices.

Application layer: This includes the protocols and interfaces that devices use to identify and communicate with each other.

Remotes: Enable entities that utilize IoT devicesto connect with and control them using a dashboard, such as a mobile application. They include smartphones, tablets, PCs, smartwatches, connected TVs, and nontraditional remotes.

Dashboard: Displays information about the IoT ecosystem to users and enables them to control their IoT ecosystem. It is generally housed on a remote.

Analytics: Software systems that analyze the data generated by IoT devices. The analysis can be used for a variety of scenarios, such as predictive maintenance.

Data storage: Where data from IoT devices is stored.

Networks: The internet communication layer that enables the entity to communicate with their device, and sometimes enables devices to communicate with each other.

IoT Predictions, Trends, and Market

BI Intelligence, Business Insider's premium research service, expects there will be more than 24 billion IoT devices on Earth by 2020. That's approximately four devices for every human being on the planet.

And as we approach that point, $6 billion will flow into IoT solutions, including application development, device hardware, system integration, data storage, security, and connectivity. But that will be money well spent, as those investments will generate $13 trillion by 2025.

Who will reap these benefits? There are three major entities that will use IoT ecosystems: consumers, governments, and businesses. For more detail, see the Industries section below.

What are the industries affected by IoT?

While we can expect IoT to affect every industry one way or another, there are several environments within the three groups of consumers, governments, and ecosystems will benefit the greatest from the IoT. These include:

What are IoT Platforms?

One IoT device connects to another to transmit information using Internet transfer protocols. IoT platforms serve as the bridge between the devices' sensors and the data networks.

The following are some of the top IoT platforms on the market today:

Amazon Web Services

Microsoft Azure

ThingWorx IoT Platform

IBM's Watson

Cisco IoT Cloud Connect

Salesforce IoT Cloud

Oracle Integrated Cloud

GE Predix

IoT Security & Privacy

As devices become more connected thanks to the IoT, security and privacy have become the primary concern among consumers and businesses. But it's not slowing IoT adoption; in fact, US smart speaker adoption has grown 54% from December 2017 to February 2018, according to a 2018 comScore survey.

However as more connected devices pop up around the globe, cyber attacks are also a growing threat. Hackers could penetrate connected cars, critical infrastructure, and even people's homes. As a result, several tech companies are focusing on cyber security in order to secure the privacy and safety of all this data.

More to Learn

The Internet of Things (IoT) is growing rapidly as companies around the world connect thousands of devices every day. But behind those devices, there's a sector worth hundreds of billions of dollars supporting the IoT.

Platforms are the glue that holds the IoT together, allowing users to take full advantage of the disruptive potential of connected devices. These platforms allow the IoT to achieve its transformational potential, letting businesses manage devices, analyze data, and automate the workflow.

In a new report, Business Insider Intelligence examines the evolving IoT platform ecosystem. We size the market and identify the primary growth drivers that will power the IoT platform space in the next five years. And we profile many of the top IoT platforms, discussing key trends in the platform industry like platform consolidation.

Here are some of the key takeaways:

The IoT platforms market is set to expand rapidly in the years to come, with current leading platforms expanding and others entering the space.

We define the key categories into which IoT platforms fall: building block open platforms, closed high-end platforms, and product management platforms.

We highlight the ways platforms can help companies reach the full five stage potential of the IoT.